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Make Your Estate Plan About More Than Just Money

Estate planning often seems to be all about numbers. Maybe you start by figuring out what you have, what it’s currently worth, and what its value is projected to be in the future. Then you decide how you want to slice up the pie for your heirs while forfeiting as little as possible in estate taxes. The emphasis is normally on maximizing the tax benefits available under federal and state laws. But the real goal of this process is to establish your legacy and help your family. When you look beyond the numbers, estate planning is all about people.

Part of our job as financial advisors is to help people discover what they hope to accomplish with the wealth they’ve built. That may involve looking back on your own life and thinking about what you’ve learned. What were your biggest successes and failures? What are your aspirations for your children, and what are their own goals that you could help them achieve?

Taking the time to reflect upon your personal history may pay off in ways you didn’t expect. You may remember a formative episode or period in your life that taught you something that could be valuable to your children, and there might be an opportunity for your estate plan to incorporate those insights. In one case, a parent wanted to leave assets in a trust to pay for the higher education of his children. But as he talked about his objectives with his advisor, he realized that most of his real education had come from life, rather than from what he absorbed in college classrooms. So the advisor worked with the man’s attorney to revise the terms of the trust so that it could finance similar experiences for his children.

In another instance, an entrepreneur confided how she had struggled for years before finally achieving success with a business venture. As a parent, she wanted to instill the same entrepreneurial spirit in her own children. Her advisors helped her devise an estate plan that would enable her children to take sensible business risks without jeopardizing their inheritances.

In brainstorming to uncover your own estate planning priorities, you might want to explore questions such as these.

What was your first job? What lessons did it teach you that have stuck with you through the years? And what was your most successful job? What did you learn from it?

If you’re married, how did you meet your spouse? How has your marriage enriched your life?

If you’re divorced, what lessons, personal or financial, did the breakdown of your marriage provide? In retrospect, were there things you could have done differently?

If you have children, think about who they are and how they’ve changed as you have watched them grow up. What are their qualities you like the most? What things about them do you wish were different?

What values and principles would you pass on to your children if you could? Why are those things important to you? How might they make a difference in the future happiness of your kids?

What circumstances led to your current financial status? Did you work your way up the corporate ladder? Are you an entrepreneur? Did you inherit a large amount of money?

What is your greatest financial success? How did you achieve it? And what has been your greatest failure? What do you wish you had done differently?

What is the smartest financial decision you ever made? What factors—your education, your work experience, things you learned from your parents, other relatives, or friends—put you in a position to make the right choice. What has been your worst decision?

Where does philanthropy rank on your list of priorities? What organizations or institutions do you routinely support, either with financial gifts or by serving as a volunteer? Do you hope to leave a charitable legacy?

What religion or spiritual tradition, if any, do you practice? How have your raised your children? How important is religion or spiritual tradition to your family?

What is your educational background? What opportunities have you given your children? Do you want to help your children and other heirs pay for their schooling?

Answering these and similar questions may suggest ways in which your estate plan could support your heirs in their quests for fulfilling, meaningful lives. And while it’s important to structure your estate to minimize taxes, other goals are just as crucial. We can work with you and your attorney to create or revise a plan that addresses your priorities.

This article was written by a professional financial journalist for G.W. Sherwold and is not intended as legal or investment advice.